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New mortgage approvals slump in December raising fears for housing market | New mortgage approvals slump in December raising fears for housing market |
(about 7 hours later) | |
Mortgage approvals by UK banks slumped dramatically in December according to the latest data from providers, raising fresh concerns about the direction of the housing market. | Mortgage approvals by UK banks slumped dramatically in December according to the latest data from providers, raising fresh concerns about the direction of the housing market. |
UK Finance reported that there were only 36,115 approvals last month, down from 44,476 in the same month in 2016 and the lowest since April 2013. | UK Finance reported that there were only 36,115 approvals last month, down from 44,476 in the same month in 2016 and the lowest since April 2013. |
The reading follows a weak report on new-buyer enquiries and agreed sales in December from the Royal Institution of Chartered Surveyors. | |
“The deterioration in consumers’ confidence, driven by the squeeze on real incomes and the November interest-rate hike, has taken a heavy toll on the mortgage market,” said Samuel Tombs of Pantheon Macroeconomics. | |
“The [bank’s Monetary Policy Committee] has seriously misjudged the ability of the housing market to withstand even modest increases in interest rates.” | |
“We expect the housing market to remain very weak this year, with house prices merely holding steady.” | “We expect the housing market to remain very weak this year, with house prices merely holding steady.” |
According to the Office for National Statistics, house prices in November 2017 were up 5.1 per cent on a year earlier, down from a growth rate of above 8 per cent at the time of the Brexit vote in 2016. | |
The latest reading from the Nationwide Building Society showed an average price-growth of 2.6 per cent in December, down from 4.5 per cent a year earlier. | |
UK Finance also reported that Britons put an additional £10.1bn on their credit cards in December, with the annual growth-rate in borrowing at 5.3 per cent, unchanged from November. | |
However, overall consumer-credit growth slowed to 0.7 per cent, down from 0.8 per cent in November and a peak of 2.9 per cent in April. | |
The Bank of England has warned about the potential threat to financial stability posed by the rapid growth in consumer credit in recent years. | The Bank of England has warned about the potential threat to financial stability posed by the rapid growth in consumer credit in recent years. |
“The Bank of England will be pleased with the slowdown in consumer credit in December and will be looking for a continuation of this trend in 2018,” said Howard Archer of the EY Item Club. | “The Bank of England will be pleased with the slowdown in consumer credit in December and will be looking for a continuation of this trend in 2018,” said Howard Archer of the EY Item Club. |